Market Review & Outlook
Malaysia Market Review: Bursa Malaysia reversed its early gains to close mostly lower, with over 900 stocks declining, reflecting ongoing market uncertainty. As a result, the FBMKLCI fell by 0.91% as investors remain concerned about strong US economic data that may keep inflation sticky and geopolitical risks stemming from Trump 2.0 administration which kept domestic investors cautious. Sectorial performance turned fairly better with five sectors rebounding, led by Technology (+1.76%) and Energy (+1.17%).
Global Markets Review: US major indices reversed earlier gains, which had been driven by strong corporate earnings. Wall Street ended in the red, with the Dow falling 0.16%, the S&P 500 dropping 0.21%, and the Nasdaq declining 0.89%, ending a three-day winning streak as large tech stocks retreated. Although corporate earnings started strong with positive bank results, sentiment turned dour on the back on concern over sustainable economic outlook. Meanwhile, European markets saw the STOXX Europe 600 provisionally close 0.93% higher, with most sectors in positive territory, reflecting US data that came in slightly below expectations. In the APAC region, markets closed positively: Japan's Nikkei 225 rose 0.33%, Hong Kong’s Hang Seng Index gained 1.08% in the final hour, South Korea’s KOSPI climbed 1.23%, and China’s Shanghai Composite increased by 0.11%.
Market Outlook: Following the recent pullback, we expect market sentiment to remain subdued due to the uncertainty surrounding Trump's potential return to office next Monday. Even stronger earnings from US giant banks failed to sustain the market rally. Therefore, we foresee the FBM KLCI to remain to remain lacklustre, while a potential attempt for a rebound is largely on the cards over the near term as bargain hunting in beaten-down stocks takes precedence. Meanwhile, investors will be watching China's Q4 2024 GDP and several key economic data to be release today.
Sector focus. We favour the technology sector, as a pro-business stance by the Trump administration, particularly in innovation, could benefit technology companies. Additionally, strong ties with the US could lead to increased demand for tech and semiconductor export-oriented players such as INARI, UNISEM, and JFTECH.
FBMKLCI Technical Outlook
Technical Commentary: The FBM KLCI recorded its fourth straight session of decline to drift further from the 1,600 psychological level yesterday. Indicators remained negative as MACD Line fell below the Signal Line, while the RSI is at the oversold range. Immediate resistance is located at 1,600. Support is envisaged around 1,530.
Company News (source: various)
Vertical Theme plans to seek approval to sell its 29% stake in Alliance Bank Malaysia Bhd to DBS Group. DBS may increase its stake to 49% if the deal proceeds, Bloomberg reports.
Hextar Industries Bhd will soft launch five Luckin Coffee outlets by the end of January 2025, starting with Sunway Pyramid and Menara EcoWorld on Jan 23. The soft opening will help gather customer feedback and refine services.
Jati Tinggi Group has secured RM25.5m contract from TNB to lay cables for data centre in Selangor. The contract is expected to be completed within 270 days from the commencement date.
Ancom Nylex Bhd reported a 31% drop in net profit for 2QFY25 to RM15.1m, down from RM22.1m from the preceding quarter, due to high freight costs and forex fluctuations impacting its gross margin. Revenue fell 11% to RM450.7m, mainly from lower contributions in the industrial chemical division. No dividend was proposed for the quarter.
Sarawak Oil Palms Bhd targets RM1.5m in revenue from its AvantHealth Avtriee Tocotrienols product debut in China, aiming to sell 10,000 bottles this year.
Sedania Innovator Bhd has appointed Darren Choy, former MD of Warner Music and Adidas Malaysia, to lead its FMCG business, replacing Ng Hock Guan.
Tanco Holdings Bhd, with shares at a 27-year high of RM2.13, proposes a 7-for-5 bonus issue of up to 3.85 bn shares, with prices expected to adjust to 51 sen.
Silver Ridge Holdings Bhd has resolved a dispute with subcontractor Wilstech over an unpaid contract, agreeing to pay RM1.0m in 24 monthly instalments. No additional costs were awarded.
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| Currency | Buy Rates (RM) | Sell Rates (RM) |
|---|---|---|
| USD | 4.207953 | 4.240384 |
| EUR | 4.900569 | 4.909007 |
| CNY | 0.592297 | 0.593304 |
| HKD | 0.541528 | 0.545709 |
| SGD | 3.238209 | 3.263373 |